05 Dec Payroll Questions & Answers

Q. What do I do if I have a VISA employee?
A. Employees working under VISA status may be subject to different taxing rules. Different VISA’s can have different rules. Your F1 VISA has different rules then you’re H1-B. Contact your payroll administrator if you have anyone working under a VISA status.

Q. When do tips need to be reported?
A. All tips must be reported through payroll for anyone making over $ 20.00 in tips per month. A tipped employee must also make minimum wage between their tips and hourly wage. The minimum hourly portion of the wage must be at least $ 3.10/ hour in Michigan. If you’re outside Michigan, visit: http://www.dol.gov/whd/state/tipped.htm

Q. When do I need to compensate an employee for travel?
A. Whether time spent traveling is considered paid worktime depends on the type of travel. Travel from home to work is usually not considered to be compensable, but there are instances where this is not the case. Two of these considerations are if the employee is already home from work and they are called out on an emergency and must travel a significant distance, and if the employee has a special assignment outside the workday to get there and back.

Q. How is overtime calculated?
A. Overtime in Michigan is calculated after 40 physical hours have been worked in a one week period. This period does not have to be a calendar week, but must consist of a predetermined seven (7) consecutive days. Regardless of your pay cycle, overtime is always looked at on a per week basis. Different states may have different overtime rules, some may pay after eight (8) hours per day or the employee may be under a collective bargaining agreement.

Q. How do pretax deductions under a Section 125 Plan affect an employee’s paycheck?
A. Pretax deductions reduce the employee’s taxable wage basis for taxing purposes. The taxable amount after pretax deductions is the basis that is reported on the W2.

Q. What taxes do 401(k) deductions effect?
A. Contributions to a 401(k) plan lower your federal and, depending on your state, taxable wage basis. 401(k) does not affect the Social Security or Medicare portion of your taxes.

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